Small Business Owner Financial Improprieties

July 3, 2018 by

small businessRunning a small business is a big responsibility. If you are the sole proprietor of a small business, you want to do everything in your power to avoid even the appearance of financial impropriety.  Experts, including local employment attorneys, generally agree on key principals toward that end.

Do Not Commingle  Your Small Business and Personal Accounts

There are plenty of sound reasons to keep your small business and personal finances separate:

  • It could otherwise lead to some unpleasant interactions with the Internal Revenue Service;
  • It is a way to acknowledge on a psychological level that separate accounts are to be used for specific—personal or business—expenses, and the two types of expenditures are not the same;
  • Transactions will be easily organized and accounted for; there will be no need to scratch your head and wonder if a particular expenditure was for business or pleasure;
  • It is easier on your accounting bill because it is more straightforward;
  • Your personal financial information will remain private;

If You Want to Get Cash Out of Your Small Business

There are plenty of smart, legal ways to get cash out of the company if that is what you want to do. Avoid having the company write out a check to pay for your personal lawn service, or creating questionable invoices to pay for personal expenses. Instead, use strategies to get money out of the company that indicate that you are coloring within the lines. These methods provide evidence of the legitimacy of your financial decisions, help the company budget flow because payments to you are anticipated, and leave a clear paper trail delineating financial transactions. Consider any of the following:

  • Paying yourself a salary;
  • Paying yourself a distribution or dividend (if you are an S-Corp) with a company check;
  • Opting for regular owner draws, as opposed to indiscriminate withdrawals if you own the company solely;
  • If you are in a real crunch for cash, taking out a shareholder loan that has traditional terms related to interest, due date, and non-payment penalties.

If You Get Caught With Sticky fingers

In the aftermath of messy financials that point to the misuse of business funds, you could be facing a number of ugly consequences:

  • A sullied reputation;
  • Consequences associated with accounting documentation that does not square up;
  • An IRS audit, for which you will have to supply invoices, receipts, and other documentation supporting your contentions;
  • Additional income tax burdens;
  • Penalties and interest on the newly configured tax liability;
  • Changes in your personal tax liability;
  • Being targeted for future IRS attention.

[Read more…]

Filed Under: Blog, Labor Law Tagged With: , ,

Public Sector Organized Labor Hobbled by SCOTUS Ruling

June 29, 2018 by

organized laborIn a blow to public sector organized labor, the Supreme Court granted a long-time wish of conservatives, rewriting a decision allowing public enterprises to charge union dues to non-union members in order to exact some contribution for collective bargaining. With the recent decision, if California workers choose not to join the union, they cannot be required to contribute to union operations.

Organized Labor – No More Share Fair Fees

Referred to as share fair fees in California, the court ruled the First Amendment rights of non-union employees are violated when compelled to support unions with which they may disagree philosophically or politically. Justice Samuel Alito wrote the majority opinion for the court’s five to four decision.

Impact on Public Sector Organized Labor Unions

Over five million workers across the country will be impacted by the court’s decision, including many right here in California. Additionally, the power of unions is expected to decline with the corresponding decline in dollars. Disgruntled union members who resent paying dues to increase the wages and job safety for non-union members are expected to drop their memberships in large numbers, reaching as high as 700,000. Why pay dues if every employee receives the same benefits, regardless of membership? The American Enterprise Institute projects membership losses of anywhere from 20-50% in coming years.

Impact on Public Sector Organized Labor Union Workers

The effects of weakened unions over recent years have already had an economic impact on all workers, union and non-union alike. Wages have been steadily dropping in line with union membership in the past decade, and are projected to be 5% lower than expected due to the decreased clout of unions. That is just about $3,000 per year for the typical non-union employee.  It is argued that the shrinking sway of unions is one of the key reasons that workers’ wages stagnate. This ruling, then, with the associated decline in union membership, is anticipated to impact roughly five million jobs in the public sector, from educators to pipe fitters.

In the past, non-union employers tended to raise wages to compete with contemporary earnings that union employers paid out, meaning entire communities enjoyed the economic boost negotiated by unions. Additionally, when the rank and file received negotiated raises, their non-union managers also generally got a pay hike. So, it seems, all workers won.

Beyond salary considerations, unions also negotiated to establish policies that promoted fair treatment and safety in the workplace. Oftentimes, those policies carried over into rival businesses, since competitors could be at a disadvantage otherwise. [Read more…]

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Factory Closings Leaving Workers Unemployed

December 12, 2017 by

factory closingsFactory closings or mass layoffs? Are you a factory worker who showed up to work one day only to be pink slipped on the spot because the factory shut down? Be advised that there are both state and federal protections for workers just like you. A local employment attorney can help you to understand your rights and ensure that you receive the protections to which you are entitled. When those protections are denied, you may find recourse in the courts.

Factory Closings and The Federal Worker Adjustment and Retraining Notification (WARN) Act

The federal WARN Act has been around since 1989, and requires employers to give workers a minimum of 60 days written notice prior to a covered plant closing or major layoff. Notice must be given directly to impacted workers or to their union representatives.

Factory Closings and What Constitutes a Covered Plant?

WARN regulations apply to businesses that employ 100 employees or more, not including those who work less than 20 hours per week or temporary employees who have worked less then half of the previous year.  These expectations apply to public and private employers, as well as non-profits and quasi-public employers. Exemptions are allowed when temporary plants are closed, or when workers were hired with the understanding that the job was temporary and factory closings are due to a specific project being completed. Also excepted are local, state, and federal entities that provide public services. When layoffs, relocation of more than 100 miles, or a plant closing affects one-third of the workforce and that number includes 50 or more workers, notice must be provided.

Three other exceptions exist:

  • Faltering Company: When a company is seeking capital or new business to stay open, and notice would eliminate or drastically limit opportunities;
  • Unforeseen Circumstances: When circumstances surrounding the business have changed dramatically and were not reasonably foreseeable;
  • Natural Disaster: When a natural disaster such as an earthquake leads to the closing or layoff.

California’s WARN Act is Even More Strict

For California workers, state regulations are even tighter. Companies with at least 75 employees, either part- or full-time, are included as covered employers. When a business closes or significantly reduces operations in such a way that 50 or more workers are impacted over a 30-day window, employees must be notified.

Penalties for Non-compliance

Employers who fail to comply with WARN Act regulations face several penalties:

  • Civil fines of up to $500 per day for federal violations;
  • Civil fines of up to $500 per day for state violations;
  • Back pay for each day of WARN violations;
  • Attorney’s fees.

[Read more…]

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I’m Being Laid Off But Must Train My Replacement?

March 5, 2015 by

santa rosa employment attorny, laid off, lay offsI’m being laid off but have to train my replacement? SCE is Southern California’s biggest utility provider. The company has recently faced public criticism after it was confirmed that SCE would be laying off many members of its large IT department in order to replace them with new hires from Tata Consultancy Services (TCS) in Mumbai, India, as well as from Infosys, an IT company in Bangalore. These new employees will be allowed to begin work in Southern California through the U.S. federal government’s H-1B program. The intent of the H-1B program is to allow foreign workers to access jobs in the U.S. that employers are unable to fill with U.S. employees. The main complaint about using the two Indian companies is that SCE already had U.S. employees who were trained, ready and willing to complete the work required, thus negating the very need for H-1B employees in the first place.

SCE and the Alleged H-1B Program Abuse

SCE is one of Southern California’s largest utility companies, which, before layoffs, reported having 1,800 employees in its IT department alone, with an additional 1,500 workers on contract. The IT department’s transition effort will result in an estimated 400 employee layoffs along with an additional 100 employees terminating their employment voluntarily. The employees who will be leaving SCE’s IT department have years of experience in their jobs, and will be forced to train their replacements in the upcoming months as part of the broader transition effort. Not surprisingly, many of the workers feel betrayed by SCE, and believe this transition is an attempt to pay lower wages to foreign employees, through the abuse of the U.S. federal government H-1B program. This argument is somewhat persuasive when one considers the very goals and purpose of the H-1B program, which is to provide employers access to non-U.S. employees when there are not enough domestic employees to provide the unique services that their businesses require. However, as one employee put it,

“Not one of these jobs being filled by India was a job that an…employee wasn’t already performing”.

Laid Off and Training My Replacement

The fact that some of the laid-off U.S. employees will be training their own successors seems to support the claim that the U.S. employees are skilled, trained and capable of providing all of the employment services that SCE requires.

In response, SCE has stated that the transition towards using Tata and Infosys H-1B employees will inevitably “lead to enhancements that deliver faster and more efficient tools and applications for services that customers rely on. Through outsourcing, SCE’s information technology organization will adopt a proven business strategy commonly and successfully used by top U.S. companies that SCE benchmarks against.”

However, SCE’s response does not touch on the issue of why California, home to Silicon Valley and some of the most advanced tech specialists and professionals, was not an adequate location to find the employees that SCE required. Some from within SCE have voiced concerns that the new Indian tech workers do not posses the necessary skill levels of the very people that they will soon replace.

The layoffs at SCE are a unique example of the immigration issues involved in foreign labor and employment. If you think you need a Santa Rosa Labor Attorney, or Mendocino County Labor Lawyer, contact the California labor and employment lawyers at Beck Law P.C. in Santa Rosa today.

Filed Under: Blog, California Employment Law, Labor Law Tagged With: , , , ,

California Employers Must Provide Training on Workplace Bullying Prevention

November 21, 2014 by

Stop Workplace BullyingCalifornia employers must now provide training on preventing workplace bullying. This has been a busy period for California employment law.  In addition to laws passed regarding unpaid interns and paid sick leave, Governor Jerry Brown also signed into law a new requirement on workplace training. AB 2053 mandates workplace bullying training be included as a part of mandatory employee training that is already required under California law.

California law currently requires employers with 50 or more employees to provide interactive training on sexual harassment, as well as additional training for supervisors, every two years.

California law specifies how the training must be conducted, including that it:

  • be interactive;
  • inform trainees of the relevant state and federal laws;
  • provide practical information and guidance to trainees;
  • include a description of the remedies available to individuals who are sexually harassed;
  • include practical examples for trainees; and
  • teach trainees on the prevention and correction of harassment.

Beginning January 1, 2015, training on “abusive conduct” will also be required in the biannual trainings.

What is abusive conduct?

The new California law defines “abusive conduct” as that “with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.” In other words, California employers will have to conduct trainings on workplace bullying.

Examples of Abusive Conduct

The law gives examples of what is considered abusive conduct, including:

  • derogatory remarks and epithets;
  • verbal threats or intimidating language;
  • humiliating language;
  • physical conduct that is threatening, intimidating or humiliating;
  • insults; and
  • sabotage of an employee’s work performance.

One single act of any of the above will not constitute abusive conduct unless it is extremely severe.

The law stops short of making workplace harassment an actionable offense. However, if the abusive conduct is because an employee is part of a protected category, the employee may have a claim under existing California anti-discrimination laws such as the Fair Employment and Housing Act (“FEHA”).

As a result, the California law mandating workplace bullying training requires employers to provide training on conduct in the workplace that is not actionable in court.  An employee cannot sue for workplace bullying unless the bullying falls under the auspices of FEHA.

Can I sue for Workplace Bullying?

Workplace bullying is currently not illegal in any state, although the issue has been in the media a lot recently.  Twenty six states have some type of legislation regarding workplace bullying at various stages.

If you are being bullied at work, it is important to speak with an experienced attorney.  You may have a claim for discrimination if the bullying is because of a protected category such as age, race, gender or religion.  Our attorneys would be happy to meet with you to discuss your situation.

Are your employee training programs adequate?

California employers may wonder if their workplace policies, training programs and human resources policies are in compliance with the rapidly changing California law.  Beck Law, P.C. can work with employers to advise on compliance with California employment laws.  Contact us today to discuss your concerns.

Filed Under: Blog, Labor Law, Workplace Harassment Tagged With: ,

Workplace Harassment or Just Playful Conversation?

August 29, 2013 by

Workplace Harassment

Q: I’m an employer of a local business, and recently there’s been a problem between several employees. One of the employees claims the others are sexually harassing her. I’m not sure the conduct qualifies as harassment, and it seems like just playful conversation. What should I do?

A: A claim of harassment by an employee should be taken very seriously by the employer, as harassment of any type, sexual, discriminatory or otherwise, continues to be a common problem in the workplace in California. The California Code of Regulations is helpful in identifying several different layers of sexual harassment, but these principles may also be applied to other types of harassment as well:

  1. Where submission to harassment is a condition of employment;
  2. Where the choice to submit or not affects employment decisions;
  3. When the purpose or effect of the conduct alleged as harassment unreasonably interferes with the employee’s work performance;
  4. When the purpose or effect of the conduct alleged as harassment unreasonably interferes with the employee’s work performance; or
  5. When the conduct alleged to be harassment creates an intimidating, hostile or offensive work environment.

Fair Employment and Housing Act

2 Cal Code Regs §§7287.6(b), 7291.1(f)(1). These categories set the prohibitions on the variety of conduct by employers and co-employees. Under the Fair Employment and Housing Act (FEHA), California law defines two types of methods to prove sexual harassment in the workplace: conduct which establishes a quid pro quo, and conduct creating a hostile work environment. Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 42 Cal.Rptr.3d 2, 11.

Sexual Favoritism

Does your employee contend that the harassment is a result of some quid pro quo arrangement with another employee or manager? The California Supreme Court defined such quid pro quo harassment as conduct that leads to “sexual favoritism”, including the award of job benefits or bonuses if the employee submits to sexual advances. Miller v. Department of Corrections (2005) 36 Cal.4th 446, 461-462. However, this also incorporates the converse, such as a manager threatening to demote or take punitive action against an employee should they not submit to sexual advances or conduct requested, expressly or impliedly.

Your employee may also be referencing a claim of a hostile work environment. The California Supreme Court has also set forth the standards in Lyle in relation to what constitutes a hostile work environment sufficient to create harassment:

Under Title VII, a hostile work environment sexual harassment claim requires a plaintiff employee to show she was subjected to sexual advances, conduct, or comments that were (1) unwelcome (see Meritor, supra, 477 U.S. at p. 68, 106 S.Ct. 2399); (2) because of sex (Oncale v. Sundowner Offshore Services, Inc. (1998) 523 U.S. 75, 80-81, 118 S.Ct. 998, 140 L.Ed.2d 201 (Oncale)); and (3) sufficiently severe or pervasive to alter the conditions of her employment and create an abusive work environment (id. at p. 81, 118 S.Ct. 998; Meritor, supra, 477 U.S. at p. 67, 106 S.Ct. 2399). In addition, she must establish the offending conduct was imputable to her employer. (Meritor, supra, 477 U.S. at pp. 69-73, 106 S.Ct. 2399.)

Lyle, 42 Cal.Rptr.3d at 12. Whenever an employee performs any type of investigation prompted by a claim of harassment, these three elements are necessary and essential questions to ask and conclusions to determine before taking any action. It may very well be that such “harassment” is in fact nothing more than workplace conversation which the employee has taken out of context, for the mere discussion of sex or vulgar, sexual language is generally insufficient to show the harassment was “because of sex”; the conduct must involve some treatment to the employee on the basis of sex itself.

In either sense, every employer should take a claim of harassment seriously. [Read more…]

Filed Under: Blog, California Employment Law, California Labor Law, Employment Law, Labor Law, News, Workplace Harassment Tagged With: , , , , ,

Human Trafficking Notice Posting Required of Certain Businesses

June 15, 2013 by

Liquor Store Human Trafficking NoticeA human trafficking notice must be posted at bus stations, truck stops and several other types of businesses.

SB 1193 requires specified businesses to post an 8.5″ x 11″ notice, on or before April 1, 2013, that contains information about organizations that provide services to eliminate slavery and human trafficking. The Department of Justice will develop a model notice that complies with the requirements of SB 1193 and make the model notice available. This notice will also be made available on HRCalifornia after the Department of Justice has created it.

 Summary of Human Trafficking Notice Requirements

The following is a summary of the requirements set forth by Senate Bill 1193. This summary is not a regulation as defined by the California Administrative Procedure Act (Gov. Code § 11340.5) and does not constitute an agency interpretation of Civil Code § 52.6.

1. Who Must Post a Public Notice

Civil Code § 52.6 mandates that the following businesses post the notice:

  1. On-sale general public premises licensees under the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000) of the Business and Professions Code).
  2. Adult or sexually oriented businesses, as defined in subdivision (a) of Section 318.5 of the Penal Code.
  3. Primary airports, as defined in Section 47102(16) of Title 49 of the United States Code.
  4. Intercity passenger rail or light rail stations
  5. Bus stations.
  6. Truck stops. For purposes of this section, “truck stop” means a privately owned and operated facility that provides food, fuel, shower or other sanitary facilities, and lawful overnight truck parking.
  7. Emergency rooms within general acute care hospitals.
  8. Urgent care centers.
  9. Farm labor contractors, as defined in subdivision (b) of Section 1682 of the Labor Code.
  10. Privately operated job recruitment centers.
  11. Roadside rest areas.
  12. Businesses or establishments that offer massage or bodywork services for compensation and are not described in paragraph (1) of subdivision (b) of Section 4612 of the Business and Professions Code.

2. Where Must the Public Notice Be Posted

Civil Code § 52.6 requires that a specified business or other establishment must post the notice in a conspicuous place near the public entrance of the establishment or in another conspicuous location in clear view of the public and employees where similar notices are customarily posted.

3. What the Public Notice Must Say

Civil Code § 52.6 requires that the public notice to be posted must be at least 8.5 inches by 11 inches and written in size 16 font. Additionally, the public notice must state:

“If you or someone you know is being forced to engage in any activity and cannot leave — whether it is commercial sex, housework, farm work, construction, factory, retail, or restaurant work, or any other activity — call the National Human Trafficking Resource Center at 1-888-373-7888 or the California Coalition to Abolish Slavery and Trafficking (CAST) at 1-888-KEY-2-FRE(EDOM) or 1-888-539-2373 to access help and services. Victims of slavery and human trafficking are protected under United States and California law.

The hotlines are:

  • Available 24 hours a day, 7 days a week.
  • Toll-free.
  • Operated by nonprofit, nongovernmental organizations.
  • Anonymous and confidential.
  • Accessible in more than 160 languages.
  • Able to provide help, referral to services, training, and general information.”

4. What Languages the Public Notices Must Contain

The specified businesses and other establishments must post the notice in English, Spanish, and in one other language that is the most widely spoken language in the business or establishment’s location (and for which translation is mandated by the Voting Rights Act, 42 U.S.C. § 1973, et seq.). For those counties where a language other than English or Spanish is the most widely spoken language, Civil Code § 52.6 does not require the public notice to be printed in the non-English and non-Spanish language.

5. The Attorney General’s Model Public Notice

The Attorney General of California has developed a “model notice” available for download on the California Department of Justice’s Internet website as of March 27, 2013. The model notice is available in English and Spanish. The Attorney General has also provided a list of counties in which a third language other than English and Spanish is the most widely spoken language.

6. Liability and Penalty for Failing to Post the Public Notice

Civil Code § 52.6(e) creates civil liability for a business or establishment that fails to comply with the posting requirement. The penalty for violating this law is $500 for a first offense and $1,000 for each subsequent offense.

If you have any questions on the Human Trafficking posting, please contact the California Attorney General’s Office, Victims’ Services Unit.

Filed Under: Blog, California Employment Law, California Labor Law, Human Trafficking, Labor Law Tagged With:

Sexual Harassment on the “Big Bang” Theory

June 13, 2013 by

WHAT EMPLOYERS NEED TO KNOWSexual Harassment and the big bang theory

“The whole universe is in a hot dense state . . .” well, in regard to sexual harassment in the work place, yes, it is.  Employers often find sexual harassment lawsuits as quite a surprise, or as the labor lawyers at Beck Law call it, a very expensive “Big Bang.”

Sexual Harassment In The Workplace Today

A recent episode of The Big Bang Theory on  CBS  shows us the realities and confusion of the human experience in conjunction with current laws regarding what is considered sexual harassment in the workplace today.

Take it from Sheldon Cooper, who tries to counsel an employee by showing her photos of venereal diseases and  telling her “Your ovaries are squirting so much goofy juice into your brain you don’t know which way is up.”

Sheldon believes he is being completely professional here.  Sheldon understands science, not social nuances.  Employers must take heed of Sheldon’s fumbling and carefully train supervisors with in depth role playing to ensure that they fully understand what actions are permissible in the workplace.

To make matters worse, because he is Sheldon, he tells his HR manager that she is “brown sugar . . . a slave to her biological urges” and called her “an egg salad sandwich.”

The episode demonstrates that although an employee’s intentions can be very innocent and honest, and meant to provide positive re-enforcement, it does not necessarily matter what the employee/ supervisor meant to say, or what their intentions were. What matters is how the receiver of the information perceived what was said. An employer must perform due diligence training of supervisors and employees to ensure that they deliver the correct message, in the correct tone and manner.

Employees, like Sheldon Cooper, may be totally unaware of what they are saying and how they are affecting those around them.

The difficulty here lies in social nuance. The skill is in the delivery of the message, rather than the intent, although one would never show web photos of venereal diseases under any circumstances to a fellow employee, this is just for TV.  Clearly, Sheldon’s intent is not malicious, the effect is.

Language training in the workplace, so that employees deliver the correct message is complex for an employer and a supervisor to grasp:  it is more about the meaning behind the words, and not always the words themselves (although with Sheldon the words were clearly wrong as well).

Employers need to keep abreast in knowing the current legalities of what to say and what not to say in the workplace. It is about what the law determines to be appropriate, yet not all persons understand how to behave, nor is it necessarily in their nature to grasp the meaning of what the laws dictate, even when they try to behave with well intentions to all employees.

Any time a harassment complaint is filed, the employer is legally obligated to investigate and reconcile the issue. Some situations require that the employee no longer works in close proximity to others until an independent outside investigation is performed, and sometimes employees must be terminated. There are many factors to consider when handling a sexual harassment complaint as an employer. Legal counsel and independent investigations are provided by the attorneys at Beck Law PC regarding sexual harassment in the workplace.

Filed Under: Blog, California Employment Law, California Labor Law, Employment Law, Labor Law Tagged With: ,

Current California Lunch Break and Rest Period Employee Labor Laws

October 25, 2012 by

The Santa Rosa Labor Law Attorneys at Beck Law P.C. work with both employees and employers in regard to all areas governing compliance with California Labor / Wage and Hour Laws.  So as not to violate current California lunch break and rest period employee labor laws, as of April 12, 2012 it is a California requirement that all non-exempt employees get uninterrupted meal breaks and rest periods according to a decision by the Supreme Court (Brinker vs. Superior Court) See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004.  The Petaluma Employment Law Lawyers at Beck Law P.C. suggest to employers that all Employee Handbooks and Policies are updated by an experienced labor attorney to ensure compliance with these new laws so that overtime violations will be avoided.  In turn, we encourage employees to contact an experienced labor and employment lawyer, such as Beck Law P.C., if they feel their legal rights are being violated.

GENERAL GUIDELINES FOR EMPLOYERS AND EMPLOYEES

The employer must relieve the employee of all duty:  The Wage and Hour Labor Law Attorneys Beck Law P.C. interpret this to mean that literally ALL NON-EXEMPT EMPLOYEE DUTY must be relieved. We encourage employers to have built in contingencies to their policies to ensure that non-exempt employees do not eat at their desks or take any phone calls or instructions while they are “clocked out”.

The employer must relinquish control over all activities of the employee:  The Ukiah Labor Attorneys at Beck Law P.C. suggest all of our business clients provide a break area for employees and to encourage non-exempt employees to take a full break as well as leave the premises whenever necessary.

The employer must permit an uninterrupted 30-minute break:  The Lake County Labor and Employment Lawyers at Beck Law P.C. suggest our business clients provide a break schedule and appoint an Office Supervisor that monitors all non-exempt employees to make sure breaks are taken in a timely manner.  All non-exempt employees must “clock in” and “clock out” and are never permitted to work at home or “off clock.”

The employer must not impede or discourage the employee from taking their 30-minute meal break:  In order to demonstrate compliance with this law as well as avoid meal period violations, the attorneys at Beck Law P.C. suggests employers hire experienced employment law attorneys to prepare the appropriate legal language to be included in all Employer Handbooks and Policies that clearly outlines the break schedule stating that employees have a responsibility to take their breaks in a timely manner.  Additionally, we encourage fellow employees to never discuss work related matters with a non-exempt employee while they are taking a break.

All Non-Exempt Employee Lunch Breaks and Rest Periods Must be Provided and Taken in a Timely Manner:  Current California labor laws for rest breaks and meal periods require that the employer provide non-exempt employees with a 30 minute uninterrupted meal break after 5 hours of work (unless the employee’s workday is completed within 6 hours), and a 10 minute rest break time after each 3 ½ hours of work.

10 Minute Breaks Must Be Paid By Employer.  Not only must an employer require a non-exempt employee to take an un-interrupted lunch or Rest break, but the employer must pay for it, according to current labor laws.  rest break violations and meal break violations can occur if a non-exempt employee is interrupted during a break or meal period and said employee is entitled to additional compensation for working through a meal break.  In addition to the one hour of pay, the extra compensation can increase the amount of overtime that you are due.

Employers May Not Pressure or Coerce the Non-Exempt Employee to Forgo a Lunch or Rest Break:  Only if ALL of the above are met will an employee be deemed to have taken a break. In particular, the California Supreme Court noted that the “wage order and the governing statute do not countenance an employer’s exerting coercion against the taking of, creating incentives to forego, or otherwise encouraging the skipping of legally protected breaks.”

What this means, in simple terms is:  A written company policy stating that you permit meal breaks and rest periods will not be legal if you do not enforce your employees to take timely breaks, that are monitored with accurate time keeping records that demonstrate that non-exempt employees “clocked in” and “clocked out” on time, every work day.  Even on extremely busy days, managers must not pressure non-exempt employees to work through breaks and must ensure rest and meal breaks are taken on time and un-interrupted, or compensate the employee in the amount of one hour’s wage for each interruption or violation.

Missed Meal Breaks and Rest Periods are considered a Wage and Not a Penalty:  In Murphy v. Kenneth Cole Productions, Inc. the courts decided that missed meal breaks are considered a wage and not a penalty. What this means is under California labor law code meal break rule violations can be collected by employees for 3 years and sometimes 4 years under the California unfair competition statute, whereas a penalty is only collectable for 1 year.

What are the Timing Requirements that Comply with First or Second Meal Periods during the Workday?

Train your management to keep in mind the 5-hour mark.  When an employee works more than five hours, a meal period must be provided no later than the end of the employee’s fifth hour of work (simply stated:  no later than the start of the employee’s sixth hour of work).  When an employee works of a period of more than 10 hours, a second meal period must be provided no later than the end of the employee’s tenth hours of work (no later than the start of the employee’s eleventh hour of work).

Filed Under: Blog, California Employment Law, California Labor Law, Employment Law, Labor Law, Meal Break Violations, News, Overtime Violations, Rest Break Violations, Wage and Hour Law Tagged With: , , , , , , , , , , ,

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